Pensioners paying NI contributions
In the last budget, the government announced that people receiving the old age pension can now continue to work and earn as much money as they want and also enjoy the full pension benefit.
This measure encouraged people over 61 years not only to continue to give their contribution to the economy but also to remain actively involved for some more years and keep them in good health. The problem these people are coming across is that they have to pay tax on what they earn from their work, pay tax on what they earn from the pension and also have to pay the national insurance.
I can easily understand that one has to pay income tax but cannot understand why a pensioner receiving the government pension has to pay the national insurance contributions.
This is making the people receiving the government pension, who decide to continue to work for some more time, the heaviest taxed people on the island and unjustly paying the NI contributions for nothing, apart from providing another source of income for the government.
I appeal to the National Association of Pensioners to raise this matter with the Minister of Social Policy and the Minister of Finance so that this can be remedied in the shortest time possible.
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Joseph Ellul
Oct 5th 2008, 06:32
Congratulations: The Maltese people have been given the chance to work past the retiring age. Apart from the fact that these working pensioners will be paying above rate taxes, I would say that the government is opening the doors for increasing the age pension again. To me it looks like this is another trick to milk the coffers and health of the boomer generation because the younger ones do not care about saving money. Unless the under 30's start to live on what they earn and save a little, then there will be no retiring age. YOU will not be able to get a pension because there will be no money in the banks and the pension schemes will be in the red. Maltese are no different from Australians. They live with plastic money, but at least Australia can borrow on the mining sector whilst Malta has nothing to borrow on. Teach your young ones to save so that you will not have to work until you die. Our children are supposed to support us in our later days but instead they have become a burden. If this remains the case then I would rather have a cat.
Neil Dent
Oct 4th 2008, 14:31
Pardon? Given the opportunity by Government to continue working after retirement age, SHOULD THEY WISH, is a gift to those wishing to do so. They continue to be active in society and earn themselves a decent wage for their efforts, while still receiving their pension.
Of course they should still be contributing through taxes and NI! There can be no distinction between the 60+ worker and any other worker in this situation.
Frank Muscat
Oct 4th 2008, 13:59
Those persons who continue working after retiring age will receive the national security pension. They have to pay national insurance contribution only if they earn more than the minimum wage.
l Galea
Oct 4th 2008, 12:25
@Owen Sant Angelo
National Insurance is mainly for pensions and unemployment benefit.
Health is paid for through other taxes, including, just to remind you, the rise in VAT from 15% to 18% to pay for the health service at Mater Dei.
O. Sant' Angelo
Oct 4th 2008, 11:45
Please correct me if I'm wrong but I believe we pay national insurance to ensure access to free health care. Considering that the elderly are the are group requiring most access to this service.........
Karen Zammit Manduca
Oct 4th 2008, 11:06
I have long been saying that in order to encourage people of pensionable age to continue working, it would be best to allow them to work for a full salary without having to pay taxes or NI contributions for as long as they feel they are able and wish to.
While doing this, they should not receive a pension until they decide to retire fully, and then they should not have to pay taxes on this.
Just imagine how much better off the pensioner would be and, in most cases, this would enable them to save for the eventuality of giving up their jobs completely. The savings would the complement their pension to allow them to have as close a standard of living as when they were employed.
During the years these people continue working, Government will save huge amounts of money on pensions, in turn compensating for the loss of tax and NI that these people would not be paying.
On the part of the person who opts to work longer, he/she will be very well compensated and this, in itself, will provide the incentive needed to continue working for as long as possible.
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